Microsoft: Strong growth through AI and cloud services

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Microsoft continues to benefit from its strategic focus on artificial intelligence (AI) and cloud services. Despite increasing investments in infrastructure, the company posted solid quarterly results. Revenue and profit growth exceeded analysts' expectations, even if the forecast for the next quarter was received cautiously.

Cloud business drives Microsoft's success

In the past quarter, Microsoft was able to increase its turnover by 16% to 65.6 billion US dollars. Net profit rose by eleven percent to 24.7 billion US dollars. The cloud segment in particular once again proved to be a growth driver. Azure, the Group's cloud platform, recorded revenue growth of 33% compared to the previous year.

The demand for cloud services is additionally fueled by the integration of AI offerings. "AI is driving change in all areas of business," explained CEO Satya Nadella at the quarterly conference. Azure has further expanded its reach and now operates data centers in over 60 regions worldwide.

Investments in AI pay off

Microsoft is increasingly focusing on AI to strengthen its market position. This includes the introduction of new AI models and the use of the latest Nvidia AI chips. Nadella emphasized that the use of AI services on Azure has increased significantly over the past six months as more and more companies move applications into the production phase.

One example of Microsoft's progress is the GitHub platform, which is revolutionizing programming with AI-supported tools such as "Copilot". "In the future, AI will be able to write complete program codes," explains GitHub boss Thomas Dohmke.

Rising expenditure on infrastructure

The massive investments in AI and cloud infrastructure are driving up costs: capital expenditure rose by 75 percent to 20 billion US dollars in the last quarter. For the current financial year, Microsoft is planning to invest around USD 80 billion in the expansion of new AI data centers - almost three times as much as in the previous year.

Despite this expenditure, Microsoft is showing discipline in its operating costs, which rose by only three percent to 14.9 billion US dollars.

Cautious quarterly forecast weighs on shares

Despite the positive quarterly results, the cautious revenue forecast for the next quarter gave investors pause for thought. Microsoft expects revenues of between 68.1 and 69.1 billion US dollars, which is slightly below market expectations.

The share was initially volatile: it rose in after-hours trading, but lost five percent at the start of trading on Thursday.

Conclusion and outlook

Microsoft's focus on AI and cloud services is bearing fruit. The strong growth shows that the company is successfully investing in forward-looking technologies. Analysts such as those at Citigroup praise the operational strength and expect Microsoft's share price to continue to rise.

With increasing capital investment and innovative AI solutions, Microsoft continues to position itself as a leading player in the technology industry. Even if short-term uncertainties influence market reactions, the long-term growth story remains intact.      

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